Beleaguered Palm, Research in Motion face pressure from Apple’s revolutionary iPhone

Apple Online Store“Research In Motion Ltd. and Palm Inc. report quarterly results Thursday that will likely show sales gains but little headway against rival Apple Inc.’s iPhone,” Yukari Iwatani Kane and Niraj Sheth report for The Wall Street Journal.

“While both Palm and RIM released new devices recently—RIM’s Storm 2 in October and Palm’s Pixi phone last month—the companies continue to face pressure from the iPhone… According to research firm IDC, RIM and Palm gained market share in smart phones from the June quarter to the September quarter. But neither kept up with the momentum of the iPhone, which gained nearly five percentage points in that time. Palm, RIM and Apple declined to comment,” Kane and Sheth report.

“‘The expectations for both [Palm and RIM] are unusually low,’ said Tero Kuittinen, senior analyst at MKM Partners. He added that the marketplace has been tough for every company with the possible exception of Apple, which sold 7.4 million iPhones in the September quarter,” Kane and Sheth report.

“Analysts on average expect RIM to ship about 9.6 million smart-phone units for the quarter—up 43% from the same period last year. But RIM warned in September that prices on its phones would likely fall in coming months,” Kane and Sheth report. “Analysts say Apple’s price cut on an older iPhone model to $99 in early June also pressured BlackBerry sales in quarter.”

Kane and Sheth report, “Palm, Sunnyvale, Calif., is also projected to show mixed results for its fiscal second quarter ended Nov. 30… Morgan, Keegan & Co. analyst Tavis McCourt expects Palm to ship 720,000 smart-phone units in the quarter, up from 599,000 a year ago.”

Full article here.

MacDailyNews Take: Say a psalm for beleaguered Palm, or give them alms, because for Palm, Apple’s iPhone is no calming balm, it’s napalm. Certainly this won’t becalm Palm investors who should be having qualms that Palm is soon to be embalmed. And things look grim for margin-squeezed RIM, too.

[Thanks to MacDailyNews Reader “mark” for the “RIM/grim” suggestion.]

18 Comments

  1. Palm is in trouble, but RIM is fine. The problem is that expectations are very high for RIM, not that they won’t sell lots of phones. I mean sales will be up 30% year over year, and people will be disappointed in RIM.

  2. MDN: “Say a psalm for beleaguered Palm, or give them alms, because, for Palm, Apple’s iPhone is no calming balm, it’s napalm. Certainly this won’t becalm Palm investors who should be having qualms that the company is soon to be embalmed. And things look grim for margin-squeezed RIM, too.”

    Kanye West: Yo MDN, I’m really happy for you and imma let you finish but, I have the worst rhyming RAP of ALL TIMES.

  3. @silverhawk

    No, more like “coup”!

    This will happen when Apple releases a CDMA iPhone and Apple announces an agreement reached to have it run on Sprint’s network and Steve Jobs will kill two birds with one stone… Verizon for passing up on the iPhone then running those commercials and Palm, which has a lot of former Apple talent creating a “smartphone” PRE that lies and said it was an iPod in order to sync which pissed Steve off.

    “Vengeance is mine, I will repay” sayith the Lord (Romans 12:19 – King James Version) and we know Steve is a “God” when it comes to all things computer techno geeky stuff!

  4. Is that silverhawk is misinformed in his comment. RIM gets paid full price for every blackberry sold. The decline in ASP is a function of mix shift and RIM trying to drive adoption by offering lower priced Blackberries. However, given that the components that go into these low priced devices cost less means RIM can actually maintain its margin. If you actually read their reports you would see margins increased last quarter and should again this quarter. Don’t believe the hype that RIM is failing, they are just going after a different strategy. And it’s beyond dumb to think the sandbox isn’t big enough for multiple winners. Only emotionally driven, stockholm syndrome afflicted fanboys will tell you iphone will attain 100% mkt share. That’s nonsense. Flame away.

  5. @the truth
    No flame, I believe your argument. The only thing that I’d quarrel with is that I’ve never seen anyone mention an expectation that the iPhone would, could or should achieve 100% market share. On the contrary, the “competition is good” comment is more typical… even for fanboys. Secondly, the Stockholm Syndrome is the behavior of staying with someone (even when the option to leave presents itself) that mistreats you in some egregious manner or has held you captive for some period against your will. Do you really think iPhone users are foolishly hanging on to their iPhones do to some mental illness?

  6. I pity the Palm shareholders.

    Who will buy Palm for the Web OS when Apple is finally defending it’s iPhone patents? Web OS breaks as many Apple patents as Nokia does.

    Palm has nothing to sell except the patents Palm holds.

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